Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Down 7.1% – Here’s What Happened

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) was down 7.1% during trading on Thursday. The stock traded as low as $32.50 and last traded at $33.39. 9,376,761 shares were traded during trading, an increase of 114% from the average daily volume of 4,381,778 shares. The stock had previously closed at $35.96.

Kratos Defense & Security Solutions News Summary

Here are the key news stories impacting Kratos Defense & Security Solutions this week:

• Positive Sentiment: Quarterly earnings were $0.24 per share, above the $0.21 consensus estimate, and revenue of $471.8 million slightly topped expectations. The beat was positive, though relatively modest. Earnings press release
• Positive Sentiment: Kratos has a $33.6 million subcontract connected to NASA’s Space Reactor-1 Freedom project, supporting its presence in advanced space systems. NASA contract analysis
• Neutral Sentiment: Management’s 2026 revenue guidance of $1.8 billion matches consensus. Fourth-quarter revenue guidance of $480 million–$510 million has a $495 million midpoint, slightly above the $493.5 million estimate, although the lower end is below consensus.
• Negative Sentiment: Shares have faced pressure amid a broader selloff and concerns about valuation after a steep pullback. With the stock carrying a high earnings multiple, investors may demand stronger forward growth to support the valuation. Report on broad selloff
• Negative Sentiment: Reports of a possible shift in congressional leadership and scrutiny of Pentagon spending priorities add uncertainty around defense procurement and funding for advanced systems. Congress and defense spending risks

Analyst Ratings Changes

A number of research analysts recently weighed in on the company. BTIG Research boosted their target price on Kratos Defense & Security Solutions from $100.00 to $104.00 and gave the stock a “buy” rating in a report on Wednesday, August 5th. Guggenheim initiated coverage on Kratos Defense & Security Solutions in a report on Monday, September 14th. They set a “buy” rating and a $74.00 price target for the company. Canaccord Genuity Group lifted their price objective on shares of Kratos Defense & Security Solutions from $130.00 to $135.00 and gave the stock a “buy” rating in a research report on Wednesday, August 5th. KeyCorp reduced their price objective on shares of Kratos Defense & Security Solutions from $130.00 to $75.00 and set an “overweight” rating for the company in a research report on Monday. Finally, B. Riley Financial decreased their price objective on shares of Kratos Defense & Security Solutions from $128.00 to $91.00 and set a “buy” rating on the stock in a report on Friday, October 30th. Three research analysts have rated the stock with a Strong Buy rating, twenty have given a Buy rating, one has assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average target price of $83.65.

Kratos Defense & Security Solutions Price Performance

The company’s 50-day simple moving average is $44.24 and its 200-day simple moving average is $63.52. The company has a debt-to-equity ratio of 0.04, a current ratio of 5.54 and a quick ratio of 4.99. The stock has a market capitalization of $6.27 billion, a price-to-earnings ratio of 196.41 and a beta of 1.18.

Kratos Defense & Security Solutions (NASDAQ:KTOS) last issued its quarterly earnings data on Thursday, November 5th. The aerospace company reported $0.24 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.21 by $0.03. Kratos Defense & Security Solutions had a return on equity of 3.07% and a net margin of 2.03%. The company had revenue of $471.80 million during the quarter, compared to analysts’ expectations of $471.40 million. Research analysts forecast that Kratos Defense & Security Solutions, Inc. will post 0.59 earnings per share for the current fiscal year.

Insider Buying and Selling at Kratos Defense & Security Solutions

In related news, Director Scot B. Jarvis sold 10,000 shares of the firm’s stock in a transaction dated Tuesday, August 18th. The shares were sold at an average price of $63.50, for a total transaction of $635,000.00. Following the transaction, the director directly owned 65,123 shares of the company’s stock, valued at approximately $4,135,310.50. This trade represents a 13.31% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Steven Fendley sold 7,000 shares of Kratos Defense & Security Solutions stock in a transaction dated Monday, August 24th. The stock was sold at an average price of $56.16, for a total transaction of $393,120.00. Following the completion of the sale, the insider owned 288,111 shares of the company’s stock, valued at $16,180,313.76. This trade represents a 2.37% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 373,013 shares of company stock worth $23,340,582 in the last 90 days. Company insiders own 1.50% of the company’s stock.

Hedge Funds Weigh In On Kratos Defense & Security Solutions

A number of hedge funds have recently added to or reduced their stakes in KTOS. Gables Capital Management Inc. lifted its position in Kratos Defense & Security Solutions by 6.6% during the third quarter. Gables Capital Management Inc. now owns 35,435 shares of the aerospace company’s stock worth $1,513,000 after purchasing an additional 2,185 shares during the period. Fulcrum Asset Management LLP grew its stake in Kratos Defense & Security Solutions by 5,877.9% during the third quarter. Fulcrum Asset Management LLP now owns 10,282 shares of the aerospace company’s stock worth $443,000 after buying an additional 10,110 shares in the last quarter. Ethic Inc. increased its holdings in Kratos Defense & Security Solutions by 40.1% in the 3rd quarter. Ethic Inc. now owns 10,150 shares of the aerospace company’s stock valued at $433,000 after buying an additional 2,907 shares during the period. Kornitzer Capital Management Inc. KS raised its position in shares of Kratos Defense & Security Solutions by 146.3% in the 3rd quarter. Kornitzer Capital Management Inc. KS now owns 217,813 shares of the aerospace company’s stock valued at $9,298,000 after buying an additional 129,364 shares in the last quarter. Finally, Kestra Advisory Services LLC raised its position in shares of Kratos Defense & Security Solutions by 19.7% in the 3rd quarter. Kestra Advisory Services LLC now owns 54,688 shares of the aerospace company’s stock valued at $2,335,000 after buying an additional 8,994 shares in the last quarter. Institutional investors own 75.92% of the company’s stock.

Kratos Defense & Security Solutions Company Profile

Kratos Defense & Security Solutions, Inc is a technology and defense contractor that develops systems and products for national security applications. The company supports the U.S. Department of Defense, intelligence agencies, national security-related organizations and selected commercial customers, with an emphasis on affordable, rapidly deployable technologies.

Its offerings include unmanned aerial and target systems, hypersonic and high-speed systems, rocket and propulsion technologies, satellite communications equipment, microwave electronics, radar and missile-defense systems, electronic warfare solutions, command-and-control systems, and virtual and live training products.